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Introduction to Hospitality Industry

In recent times, the hospitality industry in has become one of the fastest growing sectors in the world owing to the large number of tourists travelling crossing their national boundaries and moving abroad. People not only travel for spend time in leisure but also for other purposes like business and adventure. With the progress of this industry, it has become one of the highest sources that contribute towards enhancement of economy of the country as well as raise the standard of living of the people (Abu and et.al., 2012).

But, with growth and expansion of the tourism industry, there are several current issues that are faced by it. Some of the most significant ones include shortage of skilled labour or high employee turnover rate. Other ones are high costs for the organizations in hospitality industry, travel permit restrictions as well as changing demographics and its impact on travel trends. There is also the issue of emerging markets related to travel and tourism. These issues are significant to the level that they have now become higher concern for the entire hospitality industry. Of all these, one of the most crucial  issue is that of attracting as well as retaining qualified workforce within the industry as the sector is considered as a challenging to work (5 key issues facing travel and tourism, 2014).

Hospitality & Tourism Industry

With the number of changes and advancements that are taking place in the hospitality industry, its complexity as well as other related sectors are also fast developing. Owing to this factor, the sector of hospitality is developing that is also causing growth and expansion of tourism industry also. The two industries, that is, hospitality and tourism are considered as one and the same thing but these are different. Though they are inter - connected with one another. The two industries go hand in hand with each other and one is incomplete without the other (Acton, 2012). The sector of hospitality includes provision of services to the customers related to accommodation, food and beverage, recreation as well as leisure. In other words, it can be said that hospitality is the manner in which hotels welcome the guests or visitors to a hotel or restaurant and provide then overall services related like accommodation, leisure and food and beverages. On the other side, tourism is the activity by the tourists where they get engaged in travelling to tourism destinations where they desire to experience leisure time. This includes a group of businesses that encompass transportation and travel vendors like air, cruise, rail, auto as well as motor coach travel and thus work towards promotion of travel and vacations (Bernick and Boo, 2013).

The two industries are interconnected with one another as hospitality industry is the supplier of services for that of tourism one. Whether a travel as a tourist is conducted within the home country or in some foreign country but that touring or travel is closely related to the hospitality industry also. This is so as provision of accommodation as well as food and drinks are not just its key ingredient but an essential part also. The two industries are also inter related as the boundaries between travel and tourism and accommodation are quite mixed into and overlapped into one another (Groote, 2005).

The complexity of the two sectors is also quite significant as they both are related to one another. This is so as conditions within which hospitality industry function is that of high pressure environment as this entitles large working hours and also late nights in order to provide quality of services to the visitors (Hall, 2008). In addition to this, the complexity of industry lies in obligation of various legislations that hotels have to abide with. This refers to the efforts that are required to be made so as to ensure protection and security to the visitors in addition to rendering of excellent services to them. Likewise, the complexity of tourism industry lies in the fact that it is an activity that consists of a number of businesses within it. These include attractions and events, convention and exhibition sector, destination marketing as well as travel and intermediary sector (Link between tourism and hospitality, 2012).

There are various environmental implications that are related to the both the industries, that is, tourism and hospitality. The environment contexts within which the industries operate include both internal as well as the external. The external contexts mean include the technological changes that are taking place in the economy. A number of advancements are taking place in   the technology like online registration and facilitation to customers to get reviews of various organizations has raised the level of awareness of the customers. With this, it is required of the industries in order to provide quality of services to them.  Another external context is that of economic conditions prevailing in the nations according to which the industries have to operate. The internal contexts include requirement of a highly qualified and trained staff in order to provide quality of services to them (Holden, 2008).

Tourism and hospitality industry also includes collaboration of both public and private relationships. These partnerships are a kind of cooperative alliance between the two sectors in different businesses of tourism and hospitality. These are becoming more common in this industry as government now realize that agreements with private can cause a number of tangible and immediate benefits which eventually can lead to efficiency in services provided to the customers (Ip, Leung and Law, 2011).  Also, the partnerships of both these also have great importance in this sector.  Companies in this industry develop synergies and achieve competitive advantage. In this context, public private partnerships in tourism play a significant role. The cross sector partnerships cause reduction and sharing of risks as well as costs through reinforcing of financial resources and sharing of human resources (Ray and McCain, 2009). Such aspects help in achieving of higher level of efficiency and higher quality of services to the customers. The partnerships are favourable for the tourism and hospitality sectors as this lead to a stronger vision of the goals as well as strong and shared leadership as well as of responsibility. This also extends the scope of operational and opportunities for small businesses in tourism sector to reach the international markets. The partnerships in tourism industry also help in reaching at the quality standards in that of destination competitiveness (Urry and Larsen, 2011).

PEST Issues of Tourism & Hospitality Industry

The PEST analysis of issues of the hospitality and tourism industry is as follows–

  • Political – The political aspect include the government and its policies and regulations that it implies on the industries. The main issue for the sector because of the political aspect is that high level of tax and VAT other regulations which have now a negative impact on the industry. The problem is that the government considers the industry as easy target for taxation and the highest tax is on the UK air passenger. This creates problem for travellers and tourists especially from abroad (Alexander, 2007). Another issue is that of political instability within the nation as change in governments brings change in regulations again and again that hampers the running of the industry.
  • Economic – The main economic issues include the foreign exchange rate which is high in developed countries as their value of currency is also high as compared to that of developing economies. Along with this, the high rate of inflation has caused a reduction in purchasing and spending power of the people which is a matter of concern for the tourism and hospitality industry (Current issues in the hospitality industry, 2014).
  • Social – The social issues are that international tourist comes from different backgrounds and cultures as well as traditions. Owing to this, it is important for the industry to train the employees in such manner that can treat the visitors from varying backgrounds in appropriate manner.
  • Technology – The issue related to this is that because of advancement in technology there is facility for the visitors to have a virtual visit of the hotel or tourist destination and review its features. This has caused a high level of awareness because of which it has become necessary for the organizations in the industry to take serious efforts in providing high quality services to them. However, it can be critically evaluated that technology has provided a number of facilities to the customers and industry like online booking and payments (Top 10 Hospitality Industry Trends for 2013, 2014).

Significance of Political and Cultural Processes

It can be evaluated that political processes like that of efforts of the government has significant influence on the growth of the tourism industry. This is so as support from the government is also required for the expansion as well as promotion of the industry. In addition to this, the regulations and policies as issued by the authorities also favour the industry in an appropriate manner. It is the political processes like that of a stable and organised government that help the industry to become aware of its responsibilities and render the best of services to the visitors along with abiding to the rules and regulations (Anheiser, 2011). Critical evaluation can be done that it is essential for the businesses in hospitality and tourism sector to follow all norms and policies. Likewise, the cultural processes of the country also have a significant influence on the tourism and hospitality industry. It is so as it is the culture of the native tourist destination which puts a positive impact on the international tourists as this can all be a new experience for them (Baum, 2006). Every culture of every region is unique in its own way and so this has a special significance in attracting the tourists. The natural as well as the cultural heritage need to be preserved in such manner that it not only help in attracting the tourists but also raise employment opportunities for the native community. This, thus, will have a significant o effect on the entire tourism industry. Thus, it can be evaluated that it is important for the tourism industry to safeguard its culture of the country (Beaver, 2005).

Case Study

The case study taken for the present report from assignment desk is based on one of the significant issues for tourism and hospitality industry which is of high rate of employee turnover or  labour shortage.  The case study taken is that of Grange Hotels, UK which is one of the most prominent and renowned hotels in UK. The group of hotels have several branches that are located in famous and busy tourist places. These include Grange St. Paul’s Hotel, Grange Holborn Hotel and the Buckingham, London. According to a survey that was conducted in a research, it was found out that the Grange Hotels has the capability of satisfying all requirements of its visitors and customers. From the survey, it was also found that many of the employees are satisfied with the efforts taken by the organization in retaining them and their working conditions. However, many of them are not satisfied to the highest level and so there are chances for further improvements (GRANGE HOTELS, 2014).

The current issue of high rate of employee turnover in tourism and hospitality industry is relevant to the case study as the organization that is taken in the case study belong to hospitality industry. Also, the case study discusses about the level of job satisfaction of its employees which is directly related to their turnover.  If the staff is not satisfied with their working conditions like tiring and ling working hours and relationships with their employer then they will eventually leave the organization. In such conditions prevailing it is difficult for hotels to attract as well as retain the most efficient and talented workforce. The selection of the case study is also justified as high rate of employee turnover is causing shortage of skilled labour in the industry because of which it has now become important for hotels to know whether their employees are satisfied with them or not. If satisfaction is not up to a significant level then the case study also help in identifying various other measures that the hotel can take to retain its workforce. The Grange Hotels, UK is taking efforts in maintaining the level of satisfaction of its employees by providing proper working environment and establishing sound relations with them but still more efforts need to be put (Relationship of job satisfaction and employee performance (MBA HRM Dissertation, 2014).

The selection of case study is also associated with economic as well as social benefits. This is so as with the case study, various recommendations can be put for the hotel that can retain the staff. This can thus help in saving the costs of recruiting new workforce that is not efficient enough into the organization. This will also save the costs of high level of training and development to be given to less trained labour. In addition to this, the case study has social benefits as retaining of employees into the organizations will eventually lead to their development and raise their standard of living and lifestyle (Bouchier, 2012)

Discussion Main Text Analysis

From the literature review and the case study analysis, it can be said that tourism and hospitality has been growing speedily as this has a number of businesses within the industry. Because of close inter connectedness of the two sectors, that is, tourism and hospitality, it can be also said that both these are quite complex also. The complexity of the two is because of the intermingling nature and dependency of one on another. This is so as tourism includes provision of services that are related to the travel and this eventually leads to requirement of accommodation services as rendered by the hotel industry. The industries are growing at such a pace that they have now become one of the biggest contributors to the increment in economy of the nations (Cardoso and Ferreira, 2000). Thus, this has eventually resulted in up gradation of the local communities and society and increases their standard of living. The growth and expansion of the industry has also contributed towards creation of opportunities for the native people which has a direct influence on the economy of the nation.

It can be however evaluated that there are a number of environmental implications that has an influence on the working of the industries. These include both the internal as well as external contexts within which the industries have to operate (Carlsen and Andersson, 2011). The external environment includes the economic and political conditions under which the organizations within tourism have to functions. Factors like high degree of legal restrictions like that of taxes on passengers as well as their diktat of local or state governments impose restrictions on the industry. Another context in which the industry operates includes economic issues that consist of exchange rates and financial conditions prevailing in the country. The economic down turn and crisis has caused an influence on purchasing power of the people and so this has decreased the number of tourists that travel abroad for holidays (Clarke and Chen, 2012). Another aspect is that of technology as it is rising at a high speed. In this respect, the issue for the tourism and hospitality industry is that because of the increasing awareness among the customers and visitors it has now become essential for businesses in the industry to align with the latest technology. It is required of the hotels and travel agencies to include the facilities of online reservation and payments as well as wi - fi system in the hotels so that this can attract the tourists and facilitate their travel and stay. Another context within which the industry operates is that of internal environment (Conrady and Buck, 2011). Within organizations, the hospitality sector is under immense pressure as it requires long working hours and also to work during periods of holidays.  With this, one of the most significant issues related to that of high rate of employee turnover has resulted for the industry.

Today, the entire tourism and hospitality industry is facing the issue of limitedness of human resources and shortage of qualified labour. It has become quite challenging for the sector to attract as well as qualified workers. Demography, levels of wages and failure to address satisfaction of workers is increasingly become as one of the biggest challenges for the industry (Gjerald and Oggard, 2010). This in turn also led to higher costs for the hotel in recruiting and selecting of new staff again and again. This also includes incurring of additional expenditures on training and development of the less qualified and trained workforce. It can be said that problem of employee turnover is directly related to that of their job satisfaction which are further related to kind of working environment given to them as well as the feasibility of the work. The dissatisfaction of employees further deteriorates their performance at the workplace and provision of services to the visitors (Pesonen and Antti, 2013). The problem of job dissatisfaction and turnover of the staff is of great concern for the tourism industry as this not only increases their costs but also has negative impact on the services to the visitors. Lack of appropriate and high quality services has resulted in less number of tourists and especially from international boundaries thus affecting their overall image and reputation.

One of the most significant reasons behind that of high rate of employee turnover is that of dissatisfaction that is related to their job. This can be because tourism and hospitality industry requires to work under immense pressure and challenging conditions because of which employees often feel dissatisfied and they also have lack of motivation (Riege and Perry, 2000). The requirement of meeting the quality standards as well as the benchmarks set in the industry make the employees feel high level of pressure while performing their duties. The increasing number of tourists especially from the foreign countries require of the staff to fulfil their varying needs and expectations. Since the visitors belong to different cultures and backgrounds the employees are also under pressure to meet their demands according to their cultures and beliefs. The lack of flexible working hours rather long working late till night and also during time of holidays are some of the factors that causes their deviation from the industry (Varum and et.al., 2011).

In addition to this, lack of motivation from the employers also adds to their dissatisfaction. The working conditions in which the tourism and hospitality industry operates require high amount of motivation which can be in the form of monetary as well as non monetary rewards. Lack of rewards in form of appreciation and admiration from the employers causes lack of motivation for the employees. This also reduces the chances of retaining them within the industry (Fyall and Morgan, 2009). Along with this, appropriate working environment like a friendly atmosphere with colleagues as well as sound relationship with the employers are such factors that help in retaining the workforce. Such conditions also help in enhancing their satisfaction related to job and also explore more and more opportunities for them within the tourism and hospitality sector.


From the entire research it can be concluded that the hospitality and tourism industry is flourishing at its full pace but still it is several serious issues that are now required to resolve quickly. It can be said that earlier the problem of limited human resources was of different sectors but not of tourism one but now this issues has become a significant one for this industry also. It can be concluded that the problem of high rate of employee turnover has become so significant that it has now become a challenge for the industry to retain the qualified workforce (Harrison, Jayawardena and Clayton, 2003). From the case study, it can be concluded that there are organizations in UK belonging to hospitality sector that are facing the problem of employee dissatisfaction and turnover. It can be said that though hotels are taking efforts in order to retain their workforce but still more serious measures are need to be taken in order to gain maximum satisfaction.


  • Abu, R. and et.al., 2012. Hospitality and Tourism. CRC Press.
  • Acton, Q. A., 2012. Issues in Hospitality, Travel, and Tourism: 2011 Edition. ScholarlyEditions.
  • Alexander, M., 2007. Reflecting on changes in operational training in UK hospitality management degree programmes. International Journal of Contemproary Hospitality Management.
  • Anheiser, H., 2011. Cultures and Globalization: Heritage, Memory and Identity. SAGE.
  • Baum, T., 2006. Human Resource Management for Tourism, Hospitality and Leisure: An International Perspective. Cengage Learning EMEA.
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